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Dayton Ohio Mortgage Broker Breaks Down Pre-Qualification vs. Pre-Approval

I recently heard this story: 

    “Is the lender required to honor a pre-approval?  My lender pulled credit and said everything was great.  Now two weeks later after all of the vendor work they are saying my credit doesn’t qualify based on the same report they originally pulled.  They claimed to have missed something before.  What should I do?” 

Read: Dayton Ohio Mortgage Broker Terms: Revealed for more in depth definitions.

 

This is a huge issue in the Dayton Ohio Mortgage Broker industry and frankly it drives me crazy.  Which brings me to the pressing issue: 

 

What is the difference between a Pre-Approval and Pre-Qualification?

If you are starting your Dayton Ohio home search you must know the difference.  Not having the correct information can cost you thousands.

 

What is a Dayton Ohio Mortgage Brokers Pre-Approval?

A written commitment from the lender after reviewing income, debts, assets, employment history and any other resources that could help prove the credit worthiness of the client.  A pre-approval is basically underwriting a file without a property address.  The final approval is pending an appraisal, title search and no change in the borrowers income, assets, employment, etc.  As a Dayton Ohio Mortgage Broker when I issue a pre-approval I do the following things to ensure that the loan will close:

  1. Ask about the sources of income to make sure that they can be verified
  2. Pull a tri-merge credit report
  3. Run the file through an automated underwriting system
  4. Ask for proof of assets to ensure they are from an acceptable source

As a Dayton Ohio Mortgage Broker I would suggest that you always go the extra step to get a pre-approval, not a pre-qualification.  Read the following article from the National Association of Realtors as to why a pre-approved buyer has a leg up on the competition.

 

To calculate your mortgage payment click on the calculator below!!!

 

Mortgage Calculator

 

What is a Dayton Ohio Mortgage Broker Pre-Qualification?

You may have hear the term “not worth the paper it is written on”, that is a perfect example of what a pre-qualification from a Dayton Ohio Mortgage Broker is.  Unfortunately over the past several years Dayton Ohio Mortgage Brokers have gotten into trouble with breezing through a loan application and not asking the right questions and putting buyers into a position where they can’t complete the purchase because of financing. 

Buyer beware of a Dayton Ohio Mortgage Broker that seems unsure of how to read your credit report or calculate your income.  A pre-qualification consists of similar questions as a pre-approval but will be lacking a tri-merge credit report, automated underwriting findings and a complete loan application.

 

Why does a Pre-Qualified Buyer hold all the cards in Dayton Ohio?

With a larger number of homes on the market a pre-qualified buyers offer will be taken more seriously by a seller.  The good homes are still getting multiple offers after several days on the market, no seller wants to accept an offer from a buyer without a pre-approval letter.  A pre-approval letter will help you determine if you are searching for homes in the right price range.  There are good deals to be had and pre-approved buyers will have them.  See The Best Deal in Dayton Ohio Real Estate to find your next great deal or your first one!!!

 

For a FREE Pre-Approval please e-mail me at [email protected] 

 

 

 



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